Mondelēz First-Quarter Results Boosted by Emerging Markets

Oreo cookies maker Mondelez International Inc reported a higher-than-expected growth in first-quarter core revenue on Tuesday, boosted by demand for its snacks and chocolates in emerging markets and higher pricing in Latin America.

Fast-growing countries such as China and India have been a focus area for Mondelez over the last few years, with the company tailoring products and marketing to the local regions.
Core, or organic, net revenue, which excludes the impact from acquisitions and currency fluctuations, rose 3.7 percent, beating analysts' average estimate of a 2.3 percent increase, according to IBES data from Refinitiv.
Core revenue in emerging markets rose 8.4 percent.
Pricing in Latin America rose 9.9 percentage points as Mondelez, like other food companies, had to hike prices of cookies, gums and chocolates in the face of rising raw material and transportation costs.

Net earnings attributable to the company, which also makes Cadbury chocolates, fell to $914 million, or 63 cents per share, in the three months ended March 31, from $1.05 billion, or 70 cents per share, a year earlier.
Excluding one-time items, the company earned 65 cents per share, beating analysts' average estimate of 61 cents.
The company's shares rose 1.6 percent to 51.68 in extended trading.
Mondelēz CEO Dirk Van de Put said: “Our strong start to the year demonstrates clear progress against our plans to accelerate volume-led growth by adopting a more consumer-centric and agile mindset.

“We continue to see solid fundamentals in our categories and key markets, including good momentum in emerging markets. Our progress reinforces our confidence that the investments we are making behind our global and local brands, our sales capabilities and our innovation will deliver sustainable long-term growth and create value for our shareholders.”
In an earnings call with investors, Dirk Van de Put added: “We had strong growth across most global brands, but I want to call out Oreo, our biggest brand, which grew double-digit, which is quite remarkable, and also Cadbury Dairy Milk, another one of our big brands, which grew high single-digit.”

During the quarter, Mondelēz bought a minority stake in Uplift Food, a producer of prebiotic functional food supplements, and joined forces with business incubator The Hatchery Chicago to increase innovation efforts in the snacking space.
Last month, the firm, through its SnackFutures programme, announced an investment in the company behind snack brand Hu Products.
For 2019, Mondelēz predicts organic net revenue growth of between 2% and 3%.

May 02, 2019